News out of Washington focuses on oil inventories today. As gas prices rose, some blamed US oil producer executives. Today, these leaders appeared before Congress to answer a big charge – that they prioritize corporate profits over measures that could lower gas prices. Their claims that they did not engage in outright price hikes helped push oil inventories higher today. However, there are still other factors that investors should consider.
What’s going on with oil stocks
Today’s hearing featured leaders from Exxon Mobil (NYSE:XOM), Chevron (NYSE:CLC) and Shell (NYSE:SHEL). The general consensus was that oil prices are beyond their control and are influenced by external forces. “Uncertainty of supply in a tight market with growing demand is driving significant price volatility – that’s what we’re seeing today,” Exxon CEO Darren Woods said.
This trio also ended the day on a positive note, at least relative to the broader market. XOM gained 1.1% while CVX just topped 0.9%. SHEL closed up 0.7%. Peer PB (NYSE:PB) cannot say the same thing. The shares closed down 0.4%.
why is it important
No wonder oil executives are abdicating responsibility for rising gas prices. It also makes sense that oil inventories are rising as industry executives strongly support their stocks.
With many factors influencing oil prices, it is difficult to prove that specific companies are directly responsible for driving up prices. That hasn’t stopped accusations from lawmakers, who are widely split on partisan lines on the issue. In fact, however, experts have pointed to imbalances between supply and demand as responsible for the rise in prices.
Today’s hearing called him back to Wall Street. It gave industry figureheads, such as Chevon CEO Michael Wirth, the opportunity to say they have “zero tolerance for price gouging”.
why is it important
While Russia’s invasion of Ukraine certainly presented unique challenges for the industry, it has yet to have disastrous consequences for big oil companies. Despite reports that the sector is entering a bear market, oil executives are confident in the future of their industry.
As of the date of publication, Samuel O’Brient had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.